Three Things You Should Know About International Commercial Arbitration

01 Can I choose any international arbitration institution?

OK.

This question generally arises among friends who have a legal basis. Because the competent court needs to choose the court that has an actual connection with the dispute, such as the domicile of the defendant, the domicile of the plaintiff, the place of performance of the contract, the place where the contract is signed or the location of the subject matter, etc. Therefore, there will also be preconceived misunderstandings about the choice of arbitration institutions. However, the arbitration rules of the major arbitral institutions do not impose any restrictions on the parties’ choice of arbitral institutions. In short, for example, two Chinese signed a virtual currency entrustment contract in Singapore, agreeing to the jurisdiction of the Hong Kong International Arbitration Centre, and there is no problem at all.

02 Can I choose the arbitration rules and the seat of arbitration?

Generally speaking, yes, depending on the regulations of the international commercial arbitration institution itself. However, although it is not prohibited to apply the arbitration rules of arbitration institution B to arbitration institution A, such a “hybrid” arbitration agreement may cause incompatibility between the arbitration rules and the arbitration institution itself, create instability in the flexible application of the rules by the institution, and cause possible multiple jurisdictions and increase the burden of litigation between the parties. In addition, if there may be an arbitral award in a place other than the seat of the arbitral institution, how the court of the place of arbitration will exercise its jurisdiction, and whether such an arbitral award is a “foreign arbitral award” that needs to be recognized and enforced in accordance with the New York Convention at the enforcement stage. Therefore, Mr. Manquin suggested that the parties should maintain the consistency of the arbitration institution, arbitration rules and the seat of arbitration as much as possible, so as to ensure the stability of the arbitration procedure and the enforcement of the award.

03 Can I hire a Chinese lawyer to represent me in an international arbitration?

OK.

Any person authorized by the parties may become an arbitration representative. Whether it is Article 22 of the CIETAC Arbitration Rules (2015 Edition) which states that “a party may authorize a Chinese and/or foreign arbitration agent to handle the relevant arbitration matters”, or Article 23.1 of the SIAC Arbitration Rules (6th Edition) (1 August 2016) which provides that a practising lawyer or any other authorized person may participate in arbitration on behalf of the parties, or Article 13.6 of the HKIAC Administered Arbitration Rules (2018) The parties are free to choose their representatives", and even the ICC 2021 Arbitration Rules do not set any restrictions on the qualifications of representatives. Therefore, when selecting a lawyer to represent international arbitration, there is no need to be limited by the lawyer’s nationality or practice area, but only to examine the lawyer’s experience and ability in international arbitration. However, Mankiw’s friends may have further questions, if they agree to apply foreign law, can they also hire a Chinese lawyer, and Chinese lawyers also have to study foreign law, which is not a hassle?

There are two reasons for this:

(1) Except that the applicable law is a foreign law, the other elements of the case are not too foreign-related. In many cases, although the parties choose to apply foreign laws, both parties are Chinese enterprises, and the communication between the business itself is also carried out in China. In this case, if a Chinese lawyer is hired, he or she will be able to communicate efficiently, effectively complete the collection and collation of evidence, restore the facts of the case, and formulate an overall case strategy according to the demands of the enterprise. Mr. Manquinkin has also heard a lot of feedback that the experience of working with foreign lawyers by Chinese companies is inferior to that of working with Chinese lawyers.

(2) In international arbitration cases, the workload related to the applicable law does not account for a large proportion. The work related to the facts of the case, including reviewing documents and communication records, interviewing witnesses, comprehensively combing the facts of the case, evidentiary materials, and preparing the testimony of factual witnesses, may account for at least 50% of the workload of the arbitration lawyer, and the work related to the arbitration proceedings, including procedural conferences, applications for interim measures, and preparation for hearings, etc., may also account for at least 20% to 30% of the lawyer’s workload. In other words, 70% to 80% of the work of arbitration lawyers is not linked to the law applicable to the contract in question. There are many ways to solve the problem of linking to the applicable law, including the issuance of legal opinions by the country’s lawyers on specific foreign legal issues, and the hiring of legal experts to issue expert reports.

Author: Jin Jianzhi (Senior Lawyer, Shanghai Mankun Law Firm)***

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